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Telematic Revenue to Reach $20 Billion by 2018

June 3, 2014

Global revenues from consumer and commercial telematics are forecast to reach nearly $20 billion by 2018, with additional ‘soft revenues’ being generated from areas such as car servicing, ‘Big Data’ enabled by telematics and enhanced customer service, according to a new whitepaper by Juniper Research. These additional ‘soft revenues’ will form a key part of the future Connected Cars market as they will allow automotive manufacturers to generate revenues throughout the lifetime of the vehicle, rather than just at the point of sale.

Meanwhile regulation in key markets, especially those in Europe and Latin America, will mandate the inclusion of SIMs in all new vehicles allowing OEMs (Original Equipment Manufacturers) to develop revenue streams around the embedded SIM model.

Split billing will also become increasingly important. “The ability to split the telematics bill, pioneered by major operators and systems integrators will have a positive impact on the telematics market. Granular billing for infotainment and other services will lead to new business models,” added report author Anthony Cox.

The report anticipates that app integration into the vehicle through smartphone-tethering and direct integration into the head-unit will be accelerated by the launch of services like Apple’s in-vehicle offering CarPlay. It argued that in-vehicle apps will become widespread in the next five years, even though most apps will be available free of charge.

Further findings include:

Widespread smartphone-tethering and in-vehicle apps will continue to drive down the price of vehicle manufacturers’ own embedded infotainment services.

The use of 4G LTE is becoming widespread in developed markets for telematics and infotainment, particularly in North America and Europe, despite a higher module cost.